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Milwaukee Road

The Chicago, Milwaukee, St. Paul & Pacific Railroad,
(the Milwaukee Road) first appeared as the Milwaukee and Waukesha Railroad
when incorporated in 1847, but soon changed its name to the Milwaukee and Mississippi.
After several name changes, the road became known as The Milwaukee Road.

In the 1890s, the Milwaukee's directors increasingly felt that they had to extend
the railroad to the Pacific in order to remain competitive with other roads. A survey
in 1901 estimated costs to build to the Pacific Northwest as $45 million. In 1905,
the board approved the Pacific Extension, now estimated at $60 million. It was an
expensive route, however, since the Milwaukee, receiving few land grants, had to
buy most of the land or acquire smaller railroads. In addition, the five mountain
ranges that had to be crossed. The completion of 2,300 miles of railroad in only
three years was a major feat.

The Milwaukee soon found that operation of steam locomotives over the mountain passes
was difficult with winter temperatures that reached -40°F. Electrification seemed
to be the answer, especially with abundant hydro-electric power in the mountains
and a ready source of copper on-line at Anaconda, Montana. Of course, the colder
the weather, the more efficient electrical power actually is! In 1914, electrification
began between Harlowton, Montana and Avery, Idaho. In 1917, the board approved the
construction of a separate electrified district between Othello and Tacoma, Washington,
which was extended to Seattle in 1927. The two electrified districts were never
connected, but a total of 656 route-miles (1,056 km) of railroad were electrified,
making it the largest electrified railroad in the US.

The electrification was successful from an engineering and operational standpoint,
but the cost of building the Puget Sound Extension and electrification had cost
$257 million, not the $45 million the road had originally budgeted for reaching
the Pacific. The debt load and reduced revenues brought the road to bankruptcy in
1925. The railroad was re-organized as the Chicago, Milwaukee, St. Paul and Pacific
Railroad Company in January 1928 and officially adopted the familiar trade name
The Milwaukee Road.

The company had hardly a chance to make anything of its fresh start before the Great
Depression hit. The road again filed for bankruptcy in 1935. The Milwaukee operated
under trusteeship until December 1, 1945.

Relative success followed the war. The railroad dieselized in the mid 1950s, replacing
most steam locomotives by 1955 and retiring the last in 1957. Other modernizations
included modern freight yards. In association with Union Pacific Railroad, the Milwaukee
took over operations of the "Cities" — the City of Los Angeles, the
City of San Francisco, the City of Denver, the City of Portland,
as well as the all-coach Challenger from the Chicago and North Western
Railway.

During the 1960s railroad mergers had to be approved by the Interstate Commerce
Commission and in 1969 the ICC effectively blocked the merger with the Chicago and
North Western Railway (C&NW) that the Milwaukee Road had counted on and had
been planning for since 1964. The ICC asked for terms that the C&NW was not
willing to agree to. The merger of the "Hill Lines" — the Northern Pacific,
the Great Northern, and the Burlington Route, as well as the Spokane, Portland &
Seattle Railway — was approved at around the same time, and the merged Burlington
Northern came into being on March 3, 1970, completely surrounding the Milwaukee
Road.

Almost immediately after the BN merger, the owners of the C&NW offered to sell
the railroad to the Milwaukee outright. The Milwaukee board rejected the offer,
even though it would have given them what they had wanted throughout most of the
previous decade, stating that they now believed only merger with a larger system
— not a slightly smaller one — could save the railroad. Almost immediately,
the road filed with the ICC to be included in the Union Pacific merger with the
Chicago, Rock Island and Pacific Railroad. Nothing came of this, or other attempts
to force the Milwaukee into other mergers against the desires of the other participants.

In February 1973, and against the advice of studies conducted by both the railroad
and independent groups, the Milwaukee decided to scrap its electrification scheme.
The board of directors considered the electrification scheme an impediment to its
merger and consolidation plans, and that the money required to maintain it would
be better spent elsewhere. The high copper prices of time, and the $10 million the
railroad estimated it would get for selling off the copper overhead wire, contributed
to the decision.

The surveys had found that an investment of $39 million could have closed the "gap"
between the two electrified districts, bought new locomotives, and upgraded the
electrical equipment all along the line. Furthermore, the displaced diesel locomotives
could have been used elsewhere and thus reduced the requirement to purchase new,
reducing the true cost of the plan to only $18 million. General Electric even proposed
underwriting the financing because of the railroad's financial position. Rejecting
this, the railroad dismantled its electrification just as the 1973 oil crisis took
hold. By 1974, when the electrification was shut down, the electric locomotives
operated at half the cost of the diesels that replaced them. Worse, the railroad
had to spend $39 million, as much as the GE-sponsored revitalization plan, to buy
more diesel locomotives to replace the electrics, and only received $5 million for
the copper scrap since prices had fallen. The badly-maintained track, which was
the part of the system most in need of renewal, was never touched.

Things did not get much better after the electrification was dismantled. By 1977,
much of the Pacific Extension was under slow orders due to the condition of the
track, and transit times had almost tripled. Cars needing repair were being sidelined
for lack of money, and locomotives needing major service were being parked. The
road filed for bankruptcy for the third time on December 19, 1977.

The bankruptcy resulted in the Milwaukee abandoning the Pacific Extension completely
in 1980 and restructuring as a small regional line, which was eventually taken over
by the Soo Line Railroad in 1985. The ICC's auditors discovered later (too late,
as it were) that for some reason the Pacific Extension's expenses had been double-entered
during most of the 1970s. Far from the unprofitable boat-anchor the railroad and
the bankruptcy trustees said it was, the ICC found that the Pacific Extension had
been returning a profit to the railroad even through 1977 and 1978, at which time
traffic was severely down due to the road's problems. Thanks to Wikipedia.com.
For more about the Milwaukee Road go to
Milwaukee Road on Wikipedia.